EUR – Trades poorly, only just managing a close above the 200 day (1.2830) in ny and now running stops 1.2810-1.2782 low. Its the first time i dont want to be no long eur now that these range lows at 1.2800 have broken. There are bids around now here at 1.2765/80 but price action on eur and eur x’s is very poor. Support now 1.2765 then 1.2680. Topside 1.2830 (close for 200 day) then 1.2885 lvls to watch .
GBP – GBP: UK services PMI at 9.30. Cable/ EUR/GBP still treading familiar ranges. 1.6000 short term support in cable, with 0.7980-0.8000 support in the cross. Data at 9.30 could give us some short term direction but generally, I still look to play the ranges. EUR/USD though, trades heavy, so patience in getting long of both cable and EUR/GBP will probably pay off, (0.7980 and 1.5977). Order books are light suggesting little short term positioning.
JPY – Slightly disappointing that usdjpy couldnt take out that 80.65 friday (june spike high) trading only to 80.68 before profit taking took over – We walk in early ldn back at the 80.30 lvl where we went into payrols. Support should be here at 80.20/25 then 80.00 – stops now below these lvls before bids again against 79.50. I remain long with a stop at 79.80 for now looking for a retest of friday highs and ultimately a break of 80.85 (weekly cloud top).
AUD/NZD/CAD – RBA this evening remains the focus for AUD, until then we shouldn’t break this interim 1.0320-1.0400 range. Whilst most of the domestic interest will be on the Melbourne Cup, with 12bps priced the outcome of this evening’s meeting will certainly be closely monitored. I am in the ‘No cut Nov, Cut Dec’ camp so am biased to see AUD squeeze thru range highs on an unch decision. Stops either side of the market now, topside 1.0420/30 remains key with some s/l activity building through 1.0320 below. Not a great deal to report in the bird, AUDNZD continues to trade heavy though the short-term direction of the cross hinges completely on the RBA this evening. Some interest to buy down round 1.2510, nothing topside until we see a few offers kick in immediately above 1.26 figure. USDCAD very quiet for now, shame we took back our AUDCAD shorts a bit early but still advocate selling this on any rallies toward 1.04 figure. Books have thinned out remarkably over the weekend, bids still down round 0.9920/25 with some decent corp selling interest lurking above parity for now. Building permits at 1.30 LDN time is the only domestic data of note. G’luck!
Scandies – Both EUR/SEK and EUR/NOK trade heavy. 7.35 support in EUR/NOK holds but zero bounce and volumes fizzle out. Short and patient is the trade I think. Likewise in EUR/SEK, short seems the right trade but having missed 8.70, many short term players have been waiting for a bounce above 8.6400 which has failed to materialise. I run short both pairs and look to add on spikes to 7.40 and 8.6450.
Barclays Capital